Revenue grew 4.6% year-over-year in 2026Q2 with gross margin at 70.9%, but operating margin of 14.5% still lags peers like Stryker (19.5%), indicating structural inefficiencies.
Smith & Nephew plc (SNN) annual income statement — 30-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 12.24B | 6.16B | 5.81B | 5.55B | 5.21B | 5.21B | 4.56B | 5.14B | 4.9B | 4.76B | 4.67B | 4.63B | 4.62B | 4.35B | 4.14B | 4.27B | 3.96B | 3.77B | 3.8B | 3.37B | 2.78B | 2.55B | 2.39B | 2.11B | 1.79B | 1.58B | 1.69B | 1.81B | 1.75B | 1.73B | 1.83B |
| Revenue Growth % | - | 6.09% | 4.7% | 6.4% | 0.06% | 14.3% | -11.25% | 4.77% | 2.92% | 2.06% | 0.76% | 0.37% | 6.11% | 5.17% | -3.11% | 7.77% | 5.04% | -0.76% | 12.82% | 21.23% | 8.89% | 6.57% | 13.75% | 17.76% | 13.49% | -7.06% | -6.45% | 3.61% | 0.92% | -5.37% | 15.46% |
| Cost of Goods Sold | 3.74B | 1.96B | 1.73B | 1.65B | 1.51B | 1.51B | 1.38B | 1.33B | 1.3B | 1.25B | 1.27B | 1.14B | 1.16B | 1.1B | 1.07B | 1.14B | 1.03B | 1.03B | 1.08B | 994M | 769M | 701M | 642.17M | 616.25M | 531.63M | 509.96M | 0 | 0 | 0 | 0 | 0 |
| COGS % of Revenue | - | 31.75% | 29.79% | 29.81% | 29.05% | 29.05% | 30.29% | 25.91% | 26.47% | 26.19% | 27.24% | 24.67% | 25.17% | 25.28% | 25.86% | 26.7% | 26.02% | 27.31% | 28.33% | 29.5% | 27.67% | 27.47% | 26.82% | 29.27% | 29.74% | 32.37% | - | - | - | - | - |
| Gross Profit | 8.51B | 4.21B | 4.08B | 3.9B | 3.7B | 3.7B | 3.18B | 3.81B | 3.61B | 3.52B | 3.4B | 3.49B | 3.46B | 3.25B | 3.07B | 3.13B | 2.93B | 2.74B | 2.72B | 2.38B | 2.01B | 1.85B | 1.75B | 1.49B | 1.26B | 1.07B | 1.69B | 1.81B | 1.75B | 1.73B | 1.83B |
| Gross Margin % | - | 68.25% | 70.21% | 70.19% | 70.95% | 70.95% | 69.71% | 74.09% | 73.53% | 73.81% | 72.76% | 75.33% | 74.83% | 74.72% | 74.14% | 73.3% | 73.98% | 72.69% | 71.67% | 70.5% | 72.33% | 72.53% | 73.18% | 70.73% | 70.26% | 67.63% | 100% | 100% | 100% | 100% | 100% |
| Gross Profit Growth % | - | 3.14% | 4.72% | 5.27% | 0.05% | 16.33% | -16.5% | 5.57% | 2.53% | 3.53% | -2.69% | 1.04% | 6.28% | 6% | -2.01% | 6.79% | 6.89% | 0.66% | 14.69% | 18.16% | 8.59% | 5.62% | 17.7% | 18.54% | 17.92% | -37.15% | -6.45% | 3.61% | 0.92% | -5.37% | 15.46% |
| Operating Expenses | 6.94B | 3.41B | 3.42B | 3.47B | 3.25B | 3.1B | 2.88B | 2.99B | 2.74B | 2.58B | 2.6B | 2.86B | 2.71B | 2.44B | 2.22B | 2.27B | 2.01B | 2.02B | 2.08B | 1.77B | 1.45B | 1.34B | 1.28B | 1.09B | 1.52B | 839.35M | 1.6B | 1.65B | 1.51B | 1.45B | 1.52B |
| OpEx % of Revenue | - | 55.37% | 58.9% | 62.53% | 62.32% | 59.57% | 63.25% | 58.23% | 55.93% | 54.21% | 55.6% | 61.78% | 58.61% | 56.1% | 53.69% | 53.11% | 50.76% | 53.53% | 54.72% | 52.42% | 52.29% | 52.7% | 53.54% | 52.01% | 84.85% | 53.29% | 94.6% | 90.82% | 86.44% | 83.68% | 82.93% |
| Selling, General & Admin | 6.03B | 3.04B | 2.9B | 2.83B | 2.71B | 2.64B | 2.44B | 2.53B | 2.38B | 2.42B | 2.25B | 2.64B | 2.13B | 1.99B | 1.88B | 2.1B | 1.86B | 1.86B | 1.8B | 1.53B | 1.32B | 1.21B | 1.15B | 975.54M | 872.14M | 750.09M | 0 | 0 | 0 | 0 | 0 |
| SG&A % of Revenue | - | 49.25% | 49.98% | 51.07% | 51.91% | 50.59% | 53.49% | 49.32% | 48.61% | 50.77% | 48.3% | 56.99% | 46.22% | 45.64% | 45.52% | 49.2% | 46.95% | 49.42% | 47.25% | 45.41% | 47.46% | 47.49% | 47.87% | 46.34% | 48.79% | 47.62% | - | - | - | - | - |
| Research & Development | 702M | 346M | 343M | 339M | 345M | 356M | 307M | 292M | 246M | 223M | 230M | 222M | 235M | 231M | 171M | 167M | 151M | 155M | 152M | 142M | 120M | 122M | 127.36M | 119.29M | 98.78M | 74.12M | 69.3M | 73.12M | 71.54M | 69.27M | 70.73M |
| R&D % of Revenue | - | 5.61% | 5.9% | 6.11% | 6.62% | 6.83% | 6.73% | 5.68% | 5.02% | 4.68% | 4.93% | 4.79% | 5.09% | 5.31% | 4.13% | 3.91% | 3.81% | 4.11% | 4% | 4.21% | 4.32% | 4.78% | 5.32% | 5.67% | 5.53% | 4.71% | 4.09% | 4.04% | 4.09% | 4% | 3.86% |
| Other Operating Expenses | 2M | 31M | 175M | 297M | 198M | 112M | 138M | 166M | 113M | -59M | 111M | 0 | 191M | 152M | 94M | 0 | 0 | 0 | -2M | 1.55B | 0 | 0 | 0 | 0 | -58.47M | 15.14M | 1.53B | 1.57B | 1.44B | 1.38B | 1.45B |
| Operating Income | 1.57B | 794M | 657M | 425M | 450M | 593M | 295M | 815M | 863M | 934M | 801M | 628M | 749M | 810M | 846M | 862M | 920M | 723M | 630M | 493M | 537M | 422M | 317.06M | 321.07M | 242.73M | 225.86M | 214.78M | 178.43M | 209.98M | 269.29M | 311.5M |
| Operating Margin % | - | 12.88% | 11.31% | 7.66% | 8.63% | 11.38% | 6.47% | 15.86% | 17.6% | 19.6% | 17.16% | 13.55% | 16.22% | 18.62% | 20.45% | 20.19% | 23.22% | 19.17% | 16.57% | 14.63% | 19.32% | 16.54% | 13.24% | 15.25% | 13.58% | 14.34% | 12.67% | 9.85% | 12.01% | 15.54% | 17.01% |
| Operating Income Growth % | - | 20.85% | 54.59% | -5.56% | -24.11% | 101.02% | -63.8% | -5.56% | -7.6% | 16.6% | 27.55% | -16.15% | -7.53% | -4.26% | -1.86% | -6.3% | 27.25% | 14.76% | 27.79% | -8.19% | 27.25% | 33.1% | -1.25% | 32.27% | 7.47% | 5.16% | 20.37% | -15.02% | -22.03% | -13.55% | 23.07% |
| EBITDA | 2.82B | 1.37B | 1.21B | 952M | 998M | 1.16B | 840M | 1.32B | 1.29B | 1.37B | 1.22B | 1.14B | 1.19B | 1.19B | 1.17B | 1.17B | 1.21B | 1.03B | 917M | 730M | 706M | 602M | 454.39M | 464.29M | 394.78M | 313.67M | 293.94M | 266.27M | 291.97M | 336.74M | 384.29M |
| EBITDA Margin % | - | 22.18% | 20.86% | 17.16% | 19.14% | 22.18% | 18.42% | 25.63% | 26.31% | 28.73% | 26.04% | 24.58% | 25.73% | 27.44% | 28.28% | 27.35% | 30.49% | 27.44% | 24.13% | 21.67% | 25.4% | 23.59% | 18.97% | 22.05% | 22.08% | 19.91% | 17.34% | 14.7% | 16.7% | 19.44% | 20.99% |
| EBITDA Growth % | - | 12.79% | 27.31% | -4.61% | -13.67% | 37.62% | -36.22% | 2.09% | -5.77% | 12.58% | 6.76% | -4.12% | -0.5% | 2.05% | 0.17% | -3.31% | 16.71% | 12.87% | 25.62% | 3.4% | 17.28% | 32.49% | -2.13% | 17.61% | 25.86% | 6.71% | 10.39% | -8.8% | -13.29% | -12.37% | 22.27% |
| D&A (Non-Cash Add-back) | 1.24B | 573M | 555M | 527M | 548M | 563M | 545M | 502M | 427M | 435M | 415M | 511M | 439M | 384M | 324M | 306M | 288M | 312M | 287M | 237M | 169M | 180M | 137.33M | 143.21M | 152.05M | 87.81M | 79.16M | 87.84M | 82M | 67.45M | 72.78M |
| EBIT | 1.88B | 877M | 886M | 741M | 658M | 712M | 433M | 981M | 976M | 875M | 912M | 622M | 759M | 823M | 1.1B | 867M | 977M | 712M | 635M | 493M | 537M | 506M | 180M | 205M | 242.85M | 225.86M | 315.64M | 270.65M | 222.52M | 272.6M | 323.15M |
| Net Interest Income | -259.41M | -113.26M | -126.05M | -98.38M | -65.96M | -73.99M | -56.44M | -55.23M | -50.91M | -51.55M | -45.88M | -39M | -23M | -7M | 2M | -21M | -25M | -40M | -66M | -24M | 16M | 2M | 2M | -9M | 0 | 0 | -10.46M | 5.5M | -2.82M | -6.45M | -9.76M |
| Interest Income | 43.1M | 28.07M | 24.01M | 34.13M | 13.99M | 6M | 6.05M | 10.04M | 7.99M | 6.06M | 5.98M | 11M | 13M | 14M | 11M | 4M | 3M | 2M | 5M | 10M | 19M | 27M | 32.22M | 19.64M | 0 | 0 | 6.57M | 16.66M | 13.45M | 14.22M | 7.36M |
| Interest Expense | 302.5M | 141.33M | 150.06M | 132.51M | 79.95M | 79.99M | 62.48M | 65.27M | 58.9M | 57.61M | 51.86M | 50M | 36M | 21M | 9M | 12M | 18M | 42M | 71M | 40M | 9M | 18M | 13M | 10.71M | 20.46M | 0 | 17.03M | 11.16M | 16.27M | 20.66M | 17.13M |
| Other Income/Expense | -167M | -15M | -159M | -135M | -215M | -7M | -49M | -72M | -82M | -55M | 261M | -69M | -35M | -8M | 246M | -21M | -25M | -53M | -66M | -24M | 13M | 6M | 2M | -132.07M | 43.83M | -15.58M | 174.52M | 5.49M | 683K | -17.36M | -5.48M |
| Pretax Income | 1.4B | 779M | 498M | 290M | 235M | 586M | 246M | 743M | 781M | 879M | 1.06B | 559M | 714M | 802M | 1.1B | 848M | 895M | 670M | 564M | 469M | 550M | 428M | 345.83M | 410.89M | 290.73M | 210.28M | 396.1M | 294.58M | 223.26M | 251.93M | 306.02M |
| Pretax Margin % | - | 12.64% | 8.57% | 5.23% | 4.51% | 11.24% | 5.39% | 14.46% | 15.93% | 18.45% | 22.75% | 12.06% | 15.46% | 18.43% | 26.59% | 19.86% | 22.59% | 17.76% | 14.84% | 13.92% | 19.79% | 16.77% | 14.44% | 19.52% | 16.26% | 13.35% | 23.37% | 16.26% | 12.77% | 14.54% | 16.71% |
| Income Tax | 278M | 154M | 86M | 27M | 12M | 62M | -202M | 143M | 118M | 112M | 278M | 149M | 213M | 246M | 371M | 266M | 280M | 198M | 187M | 153M | 156M | 126M | 85.55M | 146.43M | 105.98M | 93.2M | 86.18M | 125.05M | 67.72M | 63.98M | 99.33M |
| Effective Tax Rate % | 19.8% | 19.77% | 17.27% | 9.31% | 5.11% | 10.58% | -82.11% | 19.25% | 15.11% | 12.74% | 26.18% | 26.65% | 29.83% | 30.67% | 33.73% | 31.37% | 31.28% | 29.55% | 33.16% | 32.62% | 28.36% | 29.44% | 24.74% | 35.64% | 36.45% | 44.32% | 21.76% | 42.45% | 30.33% | 25.39% | 32.46% |
| Net Income | 1.13B | 625M | 412M | 263M | 223M | 524M | 448M | 600M | 663M | 767M | 784M | 410M | 501M | 556M | 729M | 582M | 615M | 472M | 377M | 316M | 745M | 333M | 290.01M | 264.46M | 184.75M | 188.72M | 309.92M | 169.54M | 155.53M | 187.96M | 206.7M |
| Net Margin % | - | 10.14% | 7.09% | 4.74% | 4.28% | 10.05% | 9.82% | 11.68% | 13.52% | 16.1% | 16.79% | 8.85% | 10.85% | 12.78% | 17.62% | 13.63% | 15.52% | 12.51% | 9.92% | 9.38% | 26.81% | 13.05% | 12.11% | 12.56% | 10.33% | 11.98% | 18.29% | 9.36% | 8.89% | 10.85% | 11.29% |
| Net Income Growth % | - | 51.7% | 56.65% | 17.94% | -57.44% | 16.96% | -25.33% | -9.5% | -13.56% | -2.17% | 91.22% | -18.16% | -9.89% | -23.73% | 25.26% | -5.37% | 30.3% | 25.2% | 19.3% | -57.58% | 123.72% | 14.82% | 9.66% | 43.15% | -2.11% | -39.11% | 82.81% | 9% | -17.25% | -9.07% | 18.59% |
| Net Income (Continuing) | 1.13B | 625M | 412M | 263M | 223M | 524M | 448M | 600M | 663M | 767M | 784M | 410M | 501M | 556M | 721M | 575M | 615M | 472M | 377M | 316M | 394M | 302M | 122M | 133M | 180.65M | 117.08M | 127.09M | 151.24M | 155.5M | 187.96M | 206.7M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | - | 1.44 | 0.94 | 1.20 | 0.50 | 1.20 | 1.02 | 1.36 | 1.52 | 1.76 | 1.76 | 0.92 | 1.12 | 1.22 | 1.62 | 1.30 | 1.38 | 1.06 | 0.84 | 0.68 | 1.58 | 0.70 | 0.56 | 0.56 | 0.19 | 0.20 | 0.30 | 0.18 | 0.17 | 0.20 | 0.22 |
| EPS Growth % | - | 53.19% | -21.67% | 140% | -58.33% | 17.65% | -25% | -10.53% | -13.64% | 0% | 91.3% | -17.86% | -8.2% | -24.69% | 24.62% | -5.8% | 30.19% | 26.19% | 23.53% | -56.96% | 125.71% | 25% | 0% | 194.74% | -5% | -33.33% | 66.67% | 5.88% | -15% | -9.09% | 15.79% |
| EPS (Basic) | - | 1.46 | 0.94 | 1.20 | 0.50 | 1.20 | 1.02 | 1.38 | 1.52 | 1.76 | 1.76 | 0.92 | 1.12 | 1.24 | 1.62 | 1.30 | 1.38 | 1.06 | 0.86 | 0.68 | 1.58 | 0.72 | 0.56 | 0.56 | 0.20 | 0.20 | 0.30 | 0.19 | 0.17 | 0.20 | 0.22 |
| Diluted Shares Outstanding | 430.4M | 436.47M | 438.3M | 218.44M | 437.55M | 438.86M | 437.55M | 437.55M | 437.55M | 437.55M | 446.47M | 436.45M | 449.73M | 453M | 450.5M | 447.5M | 444.5M | 442.78M | 445M | 464M | 472M | 471.5M | 470.5M | 468M | 477.12M | 464.78M | 437.55M | 437.55M | 455.17M | 455.33M | 452.06M |
| Basic Shares Outstanding | 430.4M | 433.42M | 438.3M | 217.75M | 437.55M | 438.5M | 437.55M | 437.55M | 437.55M | 437.55M | 444.95M | 437.55M | 446.5M | 450.5M | 448.5M | 445.5M | 444M | 441.95M | 443M | 461.5M | 470.5M | 465M | 467.5M | 465M | 462.84M | 460.5M | 437.55M | 437.55M | 454.09M | 454.1M | 452.06M |
| Dividend Payout Ratio | - | 52.8% | 79.37% | 124.33% | 146.64% | 62.79% | 73.21% | 53% | 48.42% | 35.07% | 35.59% | 66.34% | 49.9% | 42.99% | 25.51% | 25.09% | 21.46% | 25.42% | 28.91% | 33.23% | 12.89% | 27.33% | 16.21% | 17.02% | 37.94% | 32.41% | 229.59% | - | - | - | - |
Quick answers to the most common questions about buying SNN stock.
For fiscal year 2025, Smith & Nephew plc (SNN) reported total revenue of $6.16B. This represents a 236.6% increase compared to $1.83B in 1996.
Smith & Nephew plc (SNN) is profitable, generating $625.0M in net income for the fiscal year ending 2025 with a net profit margin of 10.1%.
Smith & Nephew plc (SNN) reported an operating income of $794.0M, resulting in an operating profit margin of 12.9%. This margin reflects the operational efficiency of the business before interest and taxes.
Smith & Nephew plc (SNN) generated $4.21B in gross profit for the year, representing a gross profit margin of 68.3%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
China VBP pricing pressure
Steady Growth Amid Mixed Drivers
SNN's revenue grew 4.6% year-over-year in 2026Q2, per recent financial statements, with sequential acceleration from 3.4% in 2024Q2, suggesting stable demand in core segments.
The 4.6% growth in 2026Q2 is modest but consistent, with no dramatic acceleration or deceleration across the period. The mix of elective orthopaedics and recurring wound care likely provides a stable base, though the contribution from robotics and cementless knees remains unclear. Investors should monitor whether growth can sustain above 5% given competitive pressures in hips and knees.
Gross Margin Resilience at 68%
Gross margin held near 70.9% in 2026Q2, as reported in SEC filings, despite supply chain volatility, indicating pricing power in high-IP devices and a favorable product mix.
The gross margin has remained remarkably stable between 69% and 71% over the past ten quarters, with 2026Q2 at 70.9%. This suggests that SNN's portfolio of advanced wound care and sports medicine products commands premium pricing, offsetting cost pressures in metals and polymers. However, the operating margin of 14.5% is below peers like Stryker (19.5%), implying that gross margin strength is not fully translating to bottom-line profitability.
Operating Leverage Still Elusive
Operating income grew 4.4% in 2026Q2 versus revenue growth of 4.6%, per company reports, indicating that SG&A and R&D costs are scaling in line with sales, not providing incremental leverage.
Despite a 70.9% gross margin, the operating margin of 14.5% in 2026Q2 is only slightly above the 11.0% in 2024Q4, suggesting that overhead costs remain sticky. SG&A of $1.6B in 2026Q2 is the largest cost line, reflecting the specialized sales force and clinical support. The 12-Point Plan may aim to improve this, but the data shows no clear trend of operating leverage yet.
Earnings Quality Clouded by One-Offs
Net income jumped to $303M in 2026Q2 from $198M in 2024Q4, but EPS growth of 2.9% lags revenue growth, as per income statements, suggesting tax or non-operating items may be distorting.
The net margin improved to 9.8% in 2026Q2 from 6.6% in 2024Q4, but the EPS growth of only 2.9% versus revenue growth of 4.6% indicates that bottom-line growth is not fully flowing through. Stock-based compensation is modest at $34M, but restructuring charges and efficiency program costs have been recurring, which may be inflating reported net income. Investors should scrutinize the sustainability of these adjustments.
SG&A Dominates Cost Structure
SG&A of $1.6B in 2026Q2, as disclosed in financial statements, represents over 50% of revenue, highlighting the heavy investment in sales force and clinical support that pressures operating margins.
The cost structure is dominated by SG&A, which has remained around $1.4-1.6B across quarters, while R&D is relatively stable at $150-220M. This suggests that SNN's competitive advantage relies on its direct sales presence, but it also limits margin expansion. The 12-Point Plan's focus on supply chain consolidation may help, but the data shows no significant reduction in SG&A as a percentage of revenue.
2023Q4 Marked a Profitability Trough
Operating margin fell to 5.3% in 2023Q4, as per reported figures, before recovering to 14.5% by 2026Q2, indicating a significant operational turnaround driven by cost actions and volume recovery.
The 2023Q4 period saw operating income of only $150M and net income of $91M, likely due to restructuring charges and supply chain disruptions. Since then, operating margin has improved to 14.5% in 2026Q2, suggesting that the 12-Point Plan and market recovery have taken effect. However, the sustainability of this improvement is uncertain, as the latest quarter's growth was modest and no new execution milestones were disclosed.
What Could Invalidate the Base Case
Despite stable growth, SNN's operating margin of 14.5% in 2026Q2, as per financial statements, remains below peers like Stryker (19.5%), suggesting structural inefficiencies that may persist.
Short-sellers might argue that SNN's gross margin strength is offset by high SG&A and recurring restructuring charges, which could indicate a lack of true operating leverage. The 12-Point Plan has not yet delivered margin expansion beyond pre-2023 levels, and China VBP expansion into Sports Medicine could pressure growth. If revenue growth decelerates below 4% or operating margin fails to improve, the stock could de-rate further.